“China High-Tech Day” in Washington

The Tianhe-2 supercomputer at the National Supercomputer Center in Guangzhou, China. The Tianhe-2 holds the title of fastest supercomputer in the world. Source: Wikimedia, used under a creative commons license.

With Secretary of State Rex Tillerson visiting Beijing March 18-19 to discuss North Korea and other challenges in the relationship, Washington, D.C. observed a kind of informal “China High-Tech Day” on March 16, 2017. Three different events occurred that highlight the growing concern in the United States about China’s high-tech policies.

The U.S.-China Economic and Security Review Commission hosted a public hearing on China’s pursuit of frontier technologies. Experts and professionals from three industries – computing, robotics, and biotech – testified. The hearing focused on Chinese policies to strengthen its capacity in these areas, the ability for China to compete against the United States in those sectors, and the broader implication that China’s emergence as a high-tech powerhouse. A full record of the hearing can be found here.

The Information Technology & Innovation Foundation (ITIF) hosted a report-launch event. Entitled Stopping China’s Mercantilism: A Doctrine of Constructive, Alliance-Backed Confrontation, the report argues that China’s systematic mercantilism in high-tech sectors endangers the interests of U.S. economy and the global trading system. To respond, ITIF makes the case that the United States should form an international coalition against China’s actions by more aggressive enforcement of existing commitments and the creation of new international rules. The full report can be found on the ITIF website.

The U.S. Chamber of Commerce also launched a report yesterday. Titled Made in China 2025: Global Ambitions Built on Local Protections, the report analyzes China’s plan for enhancing its indigenous capabilities in various areas of advanced manufacturing and the implication of such plans for China’s trading partners. It concludes that China’s strong support for domestic players is disrupting the global markets in those sectors to China’s benefit but to the detriment of everyone else. It advocates that future government-to-government economic interactions with China prioritize addressing these market-twisting industrial policies. The full report can be found on the U.S. Chamber of Commerce website.

If we count the panel discussion on the Chinese economic challenge that briefly touched China’s technological innovation hosted by the American Enterprise Institute, four D.C. venues covered Chinese technology issues on the same day. On top of these events, perhaps the most significant development occurred earlier in the week, in a Chicago-area court, when Motorola Solutions filed a lawsuit against Shenzhen-based firm Hytera, accusing it of massive theft of trade secrets related to their two-way radios and related equipment. According to the suit, three Motorola Solutions employees downloaded thousands of files as they were departing the company and moved to Hytera. The trajectory of this case may be an important bellwether for U.S. industry’s willingness to take a firmer position on Chinese high-tech policies and the behavior of individual Chinese competitors.